Facebook is buying mobile messaging service WhatsApp for up to $19
billion in cash and stock, by far the company’s largest acquisition.
The world’s biggest social networking company said Wednesday that it
is paying $12 billion in Facebook stock and $4 billion in cash for
WhatsApp. In addition, the app’s founders and employees will be
restricted stock worth $19 billion that will vest over four years after
the deal closes.
The deal translates to roughly 9 percent of Facebook’s market value
and is bigger than any acquisition made by Google, Apple or Microsoft.
Google’s biggest deal, Motorola Mobility, stood at $12.5 billion,
while Microsoft’s largest was Skype at $8.5 billion. Apple, meanwhile,
hasn’t done a deal above $1 billion.
The acquisition makes sense for 10-year-old Facebook as it looks to
attract its next billion users while keeping its existing 1.23 billion
members, including teenagers, interested.
“Facebook seems to be in acknowledgement that people are using a lot
of different apps to communicate,” said eMarketer analyst Debra Aho
Williamson.
Facebook says it is keeping WhatsApp as a separate service, just as
it did with Instagram, which it bought for about $715.3 million in two
years ago.
WhatsApp has more than 450 million monthly active users. In comparison, Twitter had 241 million users at the end of 2013.
Facebook CEO Mark Zuckerberg says WhatsApp is on path to reach a billion users.
“The services that reach that milestone are all incredibly valuable,” Zuckerberg said.
WhatsApp, a messaging service for smartphones, lets users chat with
their phone contacts, both one-on-one and in groups. The service allows
people to send texts, photos, videos and voice recordings over the
Internet. It also lets users communicate with people overseas without
incurring charges for pricey international texts and phone calls. It
costs $1 per year and has no ads.
The deal is expected to close later this year.
Shares of Menlo Park, Calif.-based Facebook slid $1.12 to $66.94 in extended trading after the deal was announced.
Source: Theepochtimes.com
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